Form 424B5: KOPIN CORP Insider Trading

Insider Trading: Know the Rules

Insider trading is the buying or selling of a company's stock by someone who has access to material, non-public information about the company. This information could include upcoming earnings reports, product launches, or mergers and acquisitions. Insider trading is illegal because it gives the trader an unfair advantage over other investors.

The SEC's Role in Insider Trading

The Securities and Exchange Commission (SEC) is the primary regulator of insider trading in the United States. The SEC has a number of rules in place to prevent insider trading, including:

• Prohibiting insiders from trading on material, non-public information
• Requiring insiders to report their trades to the SEC
• Investigating and prosecuting insider trading violations

Penalties for Insider Trading

The penalties for insider trading can be severe. The SEC can impose civil penalties of up to $1 million per violation. The SEC can also refer cases to the Department of Justice for criminal prosecution. Criminal penalties for insider trading can include fines of up to $5 million and prison sentences of up to 20 years.

Recent Insider Trading Cases

In recent years, the SEC has brought a number of high-profile insider trading cases. Some of the most notable cases include:

• In 2013, the SEC charged SAC Capital Advisors with insider trading. SAC Capital was one of the largest hedge funds in the world, and its founder, Steven Cohen, was convicted of insider trading in 2016.
• In 2014, the SEC charged Martha Stewart with insider trading. Stewart was convicted of insider trading in 2004, and she served five months in prison.
• In 2016, the SEC charged Carl Icahn with insider trading. Icahn is a billionaire investor, and he was convicted of insider trading in 2017.

How to Avoid Insider Trading

If you are an insider, there are a number of steps you can take to avoid insider trading:

• Be aware of the SEC's rules on insider trading.
• Do not trade on material, non-public information.
• Report your trades to the SEC.
• Seek legal advice if you are unsure whether a trade is legal.
• Follow Form 424B5; https://www.sec.gov/divisions/corpfin/form424b5. The Form 424B5 is a disclosure form that is used by insiders to report their trades.

Conclusion

Insider trading is a serious offense that can have severe consequences. If you are an insider, it is important to be aware of the SEC's rules on insider trading. By following these rules, you can avoid insider trading and protect yourself from legal liability.